The Startup CPG Podcast

Semeet Shah
I was reading a story that one of my friends in the investor world posted about a children's book where this bear had this box and they wanted to take it around and they want to show off the box, but every animal basically was questioning, it's like, oh, I don't know, it's just a box or is it seems too big or it just actually like, why is it brown? All these different questions. But his goal was to bring it to his friend Mouse because he think Mouse would like the box. He got to Mouse, showed the box and the mouse like, this is the box. This is the best box ever. Now, it's a cute, silly little children's story, but it also just goes to the point where you will find a believer.

00:42
Semeet Shah
You will find people who will truly believe in your company and will believe in your product and really want to be there for it.

00:50
Hannah Dittman
Hey everyone, I hi, I'm Hannah Ditman, operations and finance host of the Startup CPG podcast and today I'm joined by Sumeet Shah of VHS Ventures. Sumeet is a seasoned consumer Investor with over 14 years across startups, tech, venture capital and private equity. He helped launch Brand Foundry Ventures and Swiftark Ventures and has supported dozens of emerging consumer brands through capital strategy and operational insight. In this episode, we break down what matters in diligence and what the process is like, including the importance of a balance sheet health check. We also explore what strong founder investor partnerships look like, what a first investor meeting should feel like, why fit matters so much, and key lessons and advice for founders navigating growth and fundraising.

01:32
Hannah Dittman
If you're fundraising, evaluating partners, or just want a smarter framework for thinking about your business through an investor's lens, this episode is packed with both insight and inspiration. Enjoy. Hey everybody. Welcome back to the Startup CPG podcast. This is Hannah and today I am thrilled to be here with Sumeet Shah of VHS Ventures. Sumeet, welcome to the show.

01:58
Semeet Shah
Thank you, Hannah. It's a pleasure to be here.

02:00
Hannah Dittman
We're really grateful that you're here with us today. I'd love to kick us off with getting some context for the rest of the conversation. Could you give us a walkthrough of your background and your path that led you to vhs?

02:10
Semeet Shah
Sure. So, VHS Ventures, early stage consumer only venture capital firm that we launched in June of 2023 focusing on the future of consumer founders across consumer products and commerce infrastructure. My background is I've been in the early and later stage side of consumer operating and investing since 2008. So from 08 to 2013 I worked with Private equity backed consumer brands and the firms, the lower middle market and middle market firms that investor were looking to invest in them. Specifically within consumer. That also generated out of the ashes of the global financial crisis really after around 2010 or so. That time, at that same timeframe, you had all of the new direct consumer startups launching and raising their first rounds of capital. Warby Parker, Birchbox, Harry's Peloton, Uber Lyft, Oscar Casper, Bonobos, Dollar Shave, Club, et cetera, et cetera.

02:57
Semeet Shah
And as they grew and raised their first rounds, I also got to meet a lot of those new early stage venture capital firms. So the Maverons, the Lehrers, the forerunners, the Consigliere brand capitals, now known as a firm called Bullish, so on and so forth. And around 2011 got to really become a go between the venture capital of private equity worlds in consumer. As a result, 2013 I moved to the startup world and I then ended up over the next 13 years helping to start two early stage consumer only venture capital firms. Brand foundry in 2014 was there for a number of years investing in 20 companies across two funds.

03:33
Semeet Shah
Companies like Allbirds, the Wing, Cotopaxi, Rockets of awesome, Lola, the Sil, Yumi, et cetera and Swiftark in 2019, which was consumer and healthcare and working a lot more behind the scenes on its infrastructure side of things. After a short stint over at team at Clearcoat in 2022, I was doing some angel checks to founders who I'd known for many years and parlayed a lot of what I was working through into a thesis, the central thesis that would ultimately become VHS Ventures, my own firm that we launched in January of 2023, but officially closed and launched in June of that year. We fully allocated deployed our first fund into 20 companies over the span of a year and a half and working on raising our second funds to just get back right into it.

04:15
Hannah Dittman
So exciting. And what a well seasoned background you have. You've spent a long time a lot of really killer firms in the space or with and around them. You have, I'm sure, a huge wealth of knowledge. This is going to be a fun chat today. I'd love to kind of understand your positioning at VHS a little bit more. Maybe we can get into your firm overview criteria, stage check size, AUM mandate and differentiation or anything else you'd like to share if that wasn't a laundry list enough.

04:41
Semeet Shah
No, of course, as I mentioned before, you know, it's the next generation of consumer founders and it's Broken down into two sectors, which is consumer products and then commerce infrastructure. Product side is everything. Cpg, food, beverage, health, beauty, wellness, apparel, accessories, fashion. And the reason behind looking at everything is because the future of consumer right is about evolving with your customers, about really evolving with customer journey. Focus on the four real trends across the customer journey, which is discovery and perusal, purchase, trial and feedback. And all four of those phases are the same between online and offline. Online, of course, when you're discovering and working through the site, offline, of course, discovering, working through the store. Over the past 15, 20 years especially, and actually really through the entire lifecycle of consumer, there have been four pillars that have really evolved.

05:31
Semeet Shah
You start with the brick and mortar side of things where it's of course the shopkeeper in that relationship they've had with the customer, but it's very unscalable, right? You only really scale to of course, not just, of course the one store, but also just the wealth of knowledge of the shopkeeper themselves, which is fine, right? It's a great opportunity to build a really and most intimate relationship with your customers. Then you look at the second pillar in wave, which is in E commerce, where it was very much satisfying that I wanted yesterday generation and the fact that you could get anything and everything, literally the everything store that is Amazon, of course being the king of the hill today or yesterday even. And while that is incredible, it's impersonal, it's very mechanical almost to its own, right?

06:12
Semeet Shah
Then you saw the next wave slash pillar really growing to omnichannel, which was basically forcing online and offline to kind of work together and cohabitate. Problem was that most companies had divisions focused on each side and there was no desire to kind of share customer data or things, especially for when you have store associates that are working on commission. Why would I actually do that? Because just basically I'm losing sales of my own, right? On top of that, you're seeing a lot of stories like Walmart, where of course they acquired Jet.com and Mark Laura and a lot of these incredible startups over the past decade or two. And that was really helpful for building out Walmart's online presence. But it really ostracized their retail arms, which was still at that point and still is today, the majority of sales from here.

06:54
Semeet Shah
So there was a lot of just struggles that existed. Now obviously they found their way forward and now you have the online division of Walmart plus and what Walmart is actually ultimately now doing very well. That's a whole different story. So how do you actually solve omnichannel? You get to the position that we like to call contextual commerce. And so when you think about the way omnichannel network, these two pillars that were kind of forced next to each other, you think about contextual commerce of two gears, an online gear and offline gear. Again, they turn in their own ways. But the chain that connects the two is that customer is the profile itself. No matter where you start online or offline, you have this opportunity. And an hopefully non invasive way is to create a profile. Right. And to create that journey.

07:35
Semeet Shah
Start the journey and move along. And over time there will be opportunities to travel to the other side of the gear itself. Right. Whether, let's say Warby Parker is probably my favorite example. Walk into the store, try out a bunch of glasses, sunglasses, you know, the associate will make sure to save the ones that you really liked. Create a profile quick with your email address and then you get an email as soon as you've left, about an hour or so afterwards to just get all the stuff you've said and then slowly increase the opportunities of touch points between. Okay, like, you know, FYI, we do eye exams. We can kind of help get this all pulled into here. Oh, we also do contacts from this. Oh, we can also figure out if you have specific needs astigmatism.

08:11
Semeet Shah
Oh, you also have opportunities to use health insurance or HSA plans from there. And so over time it slowly would integrate into being, you know, your main source for everything I wear. But also on top of it's if you maybe visit the short the stop for the first time, then you have the offline to online experience to it. Or maybe you started online ordering and trying out the pairs. They don't do that anymore of course, but what they have their AI armed to it to scan and show on your face.

08:34
Semeet Shah
It's then an opportunity where because you have all of your information, all of your stuff together from here, let's say you happen to forget your glasses or forget your sunglasses and you're in the middle of Nashville, you can go into the store and pick something up initially because they're going to have all your information on file. So it's that level of again, this natural progression between online and offline that I always look to have handled. Does that mean every company we're going to look at is going to have that immediately off the bat? No, of course not.

08:57
Semeet Shah
And what's really important about that is we will invest in companies that maybe have a lot more stronger offline presence than online but we also want to recognize like how they're also navigating and nurturing those levels of consumers and also more importantly how they're listening to them. So that's the way you look through with consumer products. On the commerce infrastructure side of things, it's really looking at these next generation tech platforms that help the business models of those brands. So everything across supply chain inventory, logistics, data analytics and commerce fulfillment. Now big question in the room is just that, will that include the future of AI? Yes, because when you look at the world of generative AI, it's really focusing on how do you actually navigate and improve those infrastructures between supply chain inventory, logistics, et cetera.

09:42
Semeet Shah
You know, a lot of behind the scenes work to make sure that you have the most optimal experience but also democratizing it. So any company, you know, even a small shop that sells only a couple products can have that opportunity to really like navigate and optimize their work. The generative side of things is that the agentic side of things is really about customer profile generation where I think the jury is still out on like who ultimately is really leading in that space, whether it's in terms of customer service or customer support. But I think it is getting better and better over time. So definitely spending a little more on the generative side of things. Now the great thing about investing in both sectors, consumer products, commerce infrastructure, is that it's a very circular thesis.

10:19
Semeet Shah
So the idea is that they work off of each other. Our commerce infrastructure founders help our product founders become case studies, slash channels. It's a very natural way to work because ultimately while we have our incredible founders, we have our incredible LPs, we also have board members who are these just powerful consumer experts, investors, executives, people from the president of Gore Brands, the makers of Gore Tex and Gore Winstopper, to the first employee of Away, who built all of its entire operation and really backbone of the company, to the former number two of Darius, who is responsible for a lot of the most successful consumer brand launches, to the original creator of an agency that became the agency of record for Spotify, for experiential retail and experiential campaigns.

11:01
Semeet Shah
To the first employee at the Ordinary, who you know, Desiem, which sold to Estee Lauder, she had became the head of innovation there and then just recently became the head of brand partnerships and storytelling at Quint's. So we're really fortunate to have all those people. But what does that mean ultimately to the end is we're not building an investment firm, we're Building a village. Every person, every stakeholder has a role and responsibility to make this firm successful. Because if the firm is successful, then ultimately everybody wins, everybody shares the spoils. You know, our founders continue to grow, succeed, have any sort of exits that they can choose. And that's the most important point to it, to have every option in their disposal. Our board members have opportunities to really just help these next generation of companies and make a little carry in the process.

11:50
Semeet Shah
We obviously succeed of course as a firm, as the GP and happy LPs and future funds and all those in between. But it is ultimately that kind of village mentality that we want to build and we are building.

12:01
Hannah Dittman
That sounds so well thought through and like a very specific and differentiated band aid. Makes a ton of sense. The synergies and symbiotic system you've got working out there and the areas of focus you've identified and why you're leaning into them. So yeah, that sounds like a huge task to take on, but one that you're doing well and clearly have a lot of passion for as far as stage focus or check size where in the ecosystem.

12:28
Semeet Shah
Yeah, so right now we're with our second fund target as we continue to raise it. We're targeting 250 to 500k checks in seed and pre seed really starting at that timeframe and look to allocate up to 1 to 3 million per company to series A. The idea is to cornerstone seed to A especially because a lot of the original consumer investors, the firms that I mentioned before, have much, much larger funds. They have to do much larger checks as a result, to the point that even will just incubate companies sometimes. And so we have an opportunity of being this player in the ecosystem where yes of course we help these companies grow and get them to the 10 to 25 million top line revenue targets for us. Profitability is preferred, but maybe 10% net loss maximum.

13:12
Semeet Shah
So then again they have every option between growth equity, private equity deals, series B plus deals, bolt on acquisitions by private equity backed companies, full M and A deals by conglomerates or even just additional secondaries to just escape or to allow the early investors to exit. The idea behind that is to build this kind of small ball, doubles, triples mentality. And so the idea that doubles can turn to triples can turn to home runs as opposed to the traditional venture model of moonshots and strikeouts or the more I guess professional way to call it is the barbell effect of the 25% zeros. The 25% fund returners and the 50% of like something in between. That's not where I want to focus on. I want to focus on good, healthy companies. Especially for the fact that you're spending time on asset heavy companies.

13:53
Semeet Shah
It's a very different animal compared to tech only, you know, SaaS only, software only companies.

13:59
Hannah Dittman
Yeah, great point. And yeah, widgets complicate the capital game dramatically for sure. When you're thinking about these pre seed deals, you know, what are you thinking through in the diligence process? What are kind of the key pillars that would make a company seem really exciting or seem really successful to you?

14:18
Semeet Shah
Yeah. So when we go through our diligence process, the first conversation is ultimately about fit. Right. Whether it's sitting with one of my teammates, one of our incredible and three teammates of mine, Andrew, or the Zoe's because we have two named Zoe, Jakubovich and Lovett. Shout out to incredible name. It's all about fit. Ultimately making sure it makes sense for us that you know, whether it's in terms of stage, in terms of size, in terms of how much they've raised and everything. And if we see the opportunity for a fit, then we look to dig a little bit more into financials. Now we spend a lot of time looking at balance sheet data, looking at the health of the company for starters. Right.

14:51
Semeet Shah
We'll do a lot of liquidity ratios ourselves to really just understand where the companies are in terms of debt, in terms of working capital, in terms of quick and current ratios and everything just from that. Because unfortunately I've seen far too many companies that look really good in terms of their P and ls, but when you then look at their balance sheets and really look at their liabilities that they currently deal from there. And look, I will always understand there are reasons behind sometimes having significantly high liabilities and owings, but it does cause a first red flag in terms of how do we manage those companies in terms of its own health. Right.

15:23
Semeet Shah
Especially for the point that you could be pouring a lot of money into your marketing and as a result you might be ending up with a bit of a house of cards type effect.

15:31
Hannah Dittman
Yeah, can we double click on that really quick? So you're talking about the difference between P and L and balance sheet and talking about kind of making sure the health of the business makes sense. From that perspective, I believe you're alluding to the cash position or the cash burn and outstanding debt needs that might be coming essentially thinking through where your capital might actually be flowing once you invest. Could you Maybe break that down, the difference between P and L and balance sheet in a little bit more layman's terms of what you're actually thinking through as an investor.

15:59
Semeet Shah
Yeah. So when we think about it, right, with P and L, it's specifically looking at your full revenues, your expenses and your overall incomes. Right. And almost every startup, I'm not expecting company to be profitable immediately from there because you have to invest enough to really grow this company, especially early on. And so while I'm never going to be looking for that level of profitability early on, I really want to understand from the P and L side of things how the company is making their money. Like what's been really working through by sources of revenue, but also how they're efficiently spending their money. If I'm looking at a lot what's been marketing, I'm like, okay, why is there a lot of marketing spend that exist in the SG&A sales, general administrative side of things?

16:35
Semeet Shah
Like are there additional payments and things that are happening between advisors and additional team members? For me, ultimately it's the question of why, like physics is the science of why. And that's also where I try to apply, especially starting with things like the P and L. And it's just really ultimately about that level of financial health of how you're thinking through it. But to me, while it is important, it does not hold as much weight compared to looking at balance sheet and your cash flow statements, of course, how your cash sources and how your cash is spent. But, but touching specifically on the balance sheet, I do have assets, you have liabilities and you have shareholders equity. Again companies still so early on. So shareholders equity is important to look at but I'm not going touch on that.

17:14
Semeet Shah
I'm going touch specifically about assets and liabilities because you have current assets that of course have a timeframe of less than a year or that are value and then of course non current assets are more tangible on there as well or more intangible, I should say. We look a lot about current assets, right. We look at everything between cash and cash operations. We look a lot between how the company's inventory exists from there and then we look a lot on the liability side of things between loans, credit card debt, you know, any other sort of additional like long term leases and things that do exist. The company's basically stuck on. Now I mentioned things about current and quick ratio and the quick ratio is current assets over current liabilities.

17:53
Semeet Shah
And so it gives a kind of health level where it's like, okay, if all of your creditors came calling today. Do you have enough current assets and hard assets to basically cover all those costs from there? Great. Now it's all the current asset exists. But then when you look at things like the current ratio, but you look at the additional ratios themselves, you will then also recognize that, like when we look at the current ratio versus the quick ratio, the current ratio is current assets over current liabilities, right? It's basically the immediate barometer of if your creditors come calling tomorrow, are you able to pay off the current liabilities off with current assets. Now, the big difference, though, between the current ratio and the quick ratio is the quick ratio also subtracts inventory.

18:35
Semeet Shah
Now, it does not always mean that you're going to be able to sell off all of your inventory immediately to kind of make those cash payments, right? They may have, you know, any day sales outstanding. They might have times in terms of how number of days that it has to actually have to sell from there to actually generate that cash, like your cash conversion cycle, as it's known, how long it actually takes to from something sitting inventory to sell. And then when you get that cash in hand from here, whether it is, of course, online, it could be instant, or if it's a wholesale retail player, right. You could deal with terms that could be things like net 30, net 60, meaning you'll get your payment in 30 days, 60 days, et cetera.

19:07
Semeet Shah
Now, we really look at those as a first baseline because I also have looked at a lot of companies that again, might have a really healthy current ratio, but they have a very serious quick ratio from there. So then I have to look deeper into how the actual cash conversion cycle and how sales data works from that angle to there. There's a bunch of other issues that we also work through there, and I won't go into there. Admittedly, they're more proprietary. But that is also something I just really wanted to address for our diligence right now as we, of course do our things. And we do, you know, two additional meetings after the FIT meeting, looking through financials and data. And then if we feel comfortable, after our first investment committee meeting, discussing the company.

19:42
Semeet Shah
From there, we will then look to the next stage where we'll open up the floor to at least three to four for board members in the fund who will have individual conversations with the companies and will have their own additional feedback. Then the team member who is championing the company will put together the full investment memo and then pitch the company ultimately for our investment at the next IC meeting. The whole thing should take around six weeks, maybe four if we're really fortunate, if we're on a schedule or a deadline for the company on its round, we'll obviously respect that and go with it.

20:09
Semeet Shah
But going back again to the way I'm thinking through this, I really want to make sure that I stress our focus on liquidity ratio and how we look through there as well, because again, there's a lot that can be looked really good on paper and those numbers can tell a deeper story. But again, have an opportunity to address the why of maybe why some founders are going through this direction, where some expenditures are existing from there and is there an opportunity to renegotiate even some of those liabilities or some of those owings from there?

20:38
Hannah Dittman
Super helpful. So just to pull it all together, the things that you're really anchoring on in your diligence process are one, fitness stage focus, all of those kind of high level topical things that are part of your mandate. And I'm sure personality fit and founder fit are a part of that as well. The P and L, obviously you want a strong, healthy P and L pulling from revenue and understanding the story of the revenue margins and all of that as well, making sure there's not any glaring red flags of how money is being spent to operate that current business. And then you're looking at the cash position and the debt health essentially of the business. It's almost like a downside protection more than it is an actual point of company strength.

21:22
Hannah Dittman
I would say to make sure that there's not going to be any kind of glaring red flags where the capital you invest might go nowhere and you don't get a return on your investment. And then obviously kind of the routinely, consistently meeting with the team and gaining conviction in the deal from there, from understanding the story and seeing the consistency in the founders throughout the process. Did I get that right?

21:43
Semeet Shah
Yes, to all the above. But I also want to add one additional piece to it. As I was talking through earlier about the way we're thinking through it with liquidity ratios and how we're looking through our diligence, I recognize there are going to be, again, a lot of whys that exist that we have to really address from here. Because that's all the quantitative analysis, the qualitative analysis has to intertwine with it because it really gives you opportunity to look at the bigger picture and really understand why if there is an issue or a situation that exists, if the founder can really have a good explanation, a good understanding for us of why it's Existing and maybe if we can help address and solve the situation for them as well with our resources.

22:20
Semeet Shah
It doesn't just give us an opportunity of where we have as an advantage to help them, but it's the relationship that, the founder investor relationship that we also look to have that just makes sense of and strengthens them from there as well. Because look, we're spending the next three to five years, seven year stretch in the trenches with this founder once we invest with them. And it is so important to make sure that we're having a good rapport, that we're transparent, we're honest about how things are working through. And that level of just honesty and transparency just needs to happen regardless. Right? I've had situations where founders have actually held information from us and we would find out at the very end in unexpected ways.

22:55
Semeet Shah
And it wasn't so much that I was really angry, I was just more disappointed because it felt like a breach of trust. We just want to make sure that we can help and we are all in this together. Again, to this point of the village mentality, you know, all of our stakeholders are dedicated to making this firm and our companies and our portfolio succeed because then we all win. And if that chain of trust is broken in any sort of way, it is going to take time to repair it. If it is even reparable at all.

23:21
Hannah Dittman
Yeah, trust is so important both ways. I think that's oftentimes compared to a marriage getting into an investor investment relationship. And what a horrible way to start a relationship if there's not that foundational level of trust there. And as an investor, you know, you're probably thinking like, oh man, if they're not even going to be honest in a diligence process, are they going to be honest with how they're using this money or if something goes really wrong in the business, you know, you want to make sure that you're going to be able to come to the table and problem solve together. And no founder would want to do business with an investor who isn't honest because they're kind of to feel like they're going to rip off my company. Our incentives aren't aligned.

23:59
Hannah Dittman
They don't care about me as a company or the success of my company. It goes both ways. You know, an investor wants to make sure that they're cared about from a business perspective too. So that makes total sense. And I think it's easy maybe for founders to get anxiety or feel judged because you are being diligence, you are being evaluated. But at the same time, what Will make it go nuclear is if. And part of that judgment process is the judgment of your character. And that can never be called into question. So definitely important to just if, you know something's a little fuzzy in your business or maybe not optimal.

24:37
Hannah Dittman
I think proactively getting ahead of communicating that and focusing on the why that is the case, like you're saying, making sure you're able to articulate why this number might not be so great or why this might be an issue but you're working towards fixing it, will always come across more strong than hiding it in the first place. Investors will know where to dig. They will know where to dig.

24:58
Semeet Shah
Yeah. I mean, it's part of our job. Right. Our ultimate goal is to mitigate risk for any of our investments. And we're going to do everything we can on the initial levels of diligence to make sure that we're looking through everything. We're leaving no stone unturned. And it's going to be annoying. Some founders in general, you know, are going to just get very frustrated, annoyed. It's like they're just being such assholes. I'm like, no, we're just. We have to do our job. We have to do the not fun things here so that we can enjoy the fun parts of this opportunity. Right. Of this relationship, of this just camaraderie or this partnership that exists from here. Whatever word you want to use from it, honestly.

25:32
Hannah Dittman
Yeah, really important point there. I'd love to kind of pivot into some lessons learned from your career. You've obviously had quite a long one and seen a ton of different things. If you could tell founders or operators a couple of pieces of advice, what would they be and why?

25:48
Semeet Shah
You have an opportunity every day to be eternally curious. I think the most successful founders have that level of eternal curiosity, and it applies to your work goes to life. And it gives you this opportunity then to kind of stick out of the weeds sometimes and just really look at where things are going. And when you're able to approach it from that mentality, you really can come with incredible ideas, incredible innovations, incredible plans to get professionally and personally, and you're going to be with that also. It's going to be challenged. You know, you're going to deal with jerks literally out there and people who are going to really say no. Right.

26:29
Semeet Shah
And I was reading a story that one of my friends in the investor world posted about a children's book where this bear had this box and they wanted to take it around and they want to show off the box. But every animal basically was questioning, it's like, oh, I don't know, it's just a box, or is it seems too big? Or it just actually like, why is it brown? And all these different questions. But his goal was to bring it to his friend Mouse because he think Mouse would like the box. He got to Mouse, showed the box, and the mouse like, this is the box. This is the best box ever. Now, it's a cute, silly little children's story, but it also just goes to the point where you will find a believer.

27:03
Semeet Shah
You will find people who will truly believe in your company and will believe in your product and really want to be there for it. I think the most important thing, especially for founders, that you should think through, and I say this as an investor too, not every company should be backed by venture capital. There are so many other resources to raise additional funding that you're thinking through, whether it is through various debt infrastructures like bank loans and credit card debt, and some friends and family investments are like much smaller individuals themselves. And success shouldn't always have to be like tens of millions of dollars, hundreds of millions of dollars, sales for tens, hundreds of millions of dollars from there, right?

27:38
Semeet Shah
A successful company can be one, right, that makes half a million dollars top line, and, you know, generates a profit, maybe a 5% profit margin, and just gives you an opportunity to pay yourself a healthy salary and have great workers and pay them great and build something from that. Right? And then build it to a place where you can choose wherever you go next, whether you decide to sell, where you decide to pass it down or whatnot. And that is, I think, one of the most magical things about the world of consumer is companies themselves can be successful in their own rights. And yes, as a venture investor, I'm always going to be looking for those next generations of great companies that I want to grow and I want to help grow to those levels and where I truly believe they can.

28:18
Semeet Shah
But I'm also never going to try to pressure founders into it. And that should be something that should never happen. And so even that other additional piece of advice to the founder is don't cave into the pressure of, hey, I should be doing this. The market is telling me to do this, or the ecosystem is telling me to do this. If it truly doesn't make sense as an opportunity to grow, then usually more often than not, it's not. It's too good to be true. It doesn't make sense, it doesn't fit into your thesis. Doesn't fit into your business model. I was literally talking to a founder this morning. She has developed this food startup that makes tempeh chips.

28:49
Semeet Shah
She is based out of Indonesia and when they manufacture the chips and while they've got some great west coast sales in the United States, great partners, great collaborators, she's never really had an opportunity to like sit within the United States market and really see how the trends and things are going. And she's like, am I missing anything? Am I missing all this stuff? Like I feel nervous about it. And I'm like, look, would it help for you to be in the action and kind of see everything on the ground? Sure, of course. But at the same time, you can also bring on fractional salespeople, bring on a good advisor that can help boots on the ground from here.

29:20
Semeet Shah
But also you're going to need those extra eyes and ears if you can and when you can, to also think about most of it's kind of bs, you know, it's not going to fit with you. Right. And also if you are building something that is successful in its own right, don't second guess yourself. Right. And I will say this to any founder listening too. Yes, we have our incredible portfolio company founders who will always help for the benefit of the firm and the benefit of the portfolio and benefit for their futures. But if there's any founder who's listening to this and is just stuck on something and just, hey, can I sit with you for like 15 minutes and just try to work through something that's kind of blocking me or should I consider going raising venture funding? Should I just consider doing this?

29:57
Semeet Shah
I'm happy to do so. Because also to the point is, and the final piece of advice I'll give to founders is the investor founder relationship should never be scary. Not even just of course, if they've invested in you, but also in this ecosystem itself. So if you want to go talk to the Ben Lehrers or Kirsten Greens or Sumeet Shah’s or whatnots of the world, fine, reach out and just be genuine, be authentic. Obviously have context to it where you think that they can be helpful versus just of course, like a true cold outreach. It's like, hey, I think you're smart, like everything. Like you gotta be smart about it. It's also where cold intros actually matter if you actually built the context to it. But that level of it's a buzzword.

30:31
Semeet Shah
But that level of authenticity, that level of just true transparent care can really take you far.

30:37
Hannah Dittman
Very wise words and well said. It's so clear how much passion you have for your job, your role, and also kind of the anchor you can play in the ecosystem for other people getting where they need to go. It really does take a village sometimes and no one has full, perfect knowledge in every single aspect of the business building journey. And it's nice to be able to have the human touch and be able to be approachable and to tap the people who maybe know part of the equation that you don't. And I think that really stands out as unique amongst investors. And I can definitely tell you have a lot of a human touch and a lot of care and empathy for founders, which is so important. Speaking of founder questions, I'd love to pivot into a Slack question.

31:20
Hannah Dittman
As you know, startup CPG has the largest Slack community in the industry with now over 35,000 members. I'd love to pull a question directly from our channel and have you answer it as a case study for any founder that might have a similar question. Today's question is what should the first chat with an investor be like?

31:37
Semeet Shah
Yeah, so I'm part of that Slack group and it is incredible how infinite the wealth of resources and knowledge base exists on there. So kudos to you, kudos to Daniel and the whole crew for building it and for just continuing to grow. What should a first chat with an investor be like? It's the fit chat. Not just a fit for your company, for you, for them, but ultimately if this investor, if this investment firm too of course makes sense for you because there's two fits that you are qualifying on there as well. One, of course, the investment firm itself. What can the firm potentially do? Let's say you really want to work with firm ABC and you hear about we do this, we do that, really have the opportunity to kind of learn more on how they actually help their founders. Right?

32:19
Semeet Shah
It's about that fit. But there's also this side of it where if you really gel with that investor, like let's say the investment firm might not make sense, but you really gel with that investor. The wealth of partnerships that can come out of it. If they of course believe in you and that relationship does click, that fit really does click. You'd be surprised at what could happen. I'll give you an example. There was a company during the Brand Foundry years that we approached very prominent investment firm, a venture capital firm that invests in female founded companies. And the firm unfortunately was spending more time in consumer tech. And so they didn't really see the opportunity that they could have invested in on the firm.

32:56
Semeet Shah
But one of the two partners who was a very successful consumer executive, you know, she ran Shiring Global brand for aol. She ran a lot of stuff for, you know, Hub to post Martin Stewart on the media, whatnot. She really loved the company and really just saw so much potential within the founder that she ended up becoming angel investor herself. It was great. I mean she opened up so many doors. She opened up, you know, a door as to another angel investor who was the time the head of qvc and you know, as QVC and HSN merged, she became the head of Weight Watchers or WW when it became on that end and we just had these great, incredible women executives who ended up coming to invest in the company itself. And it was awesome, you know.

33:37
Semeet Shah
And she also opened up so many other doors on like media and contact and partnerships there too. So the first chat with the investor should be about that fit. But also just how do you gel with this person too, right? And not every conversation is going to get all warp and fuzzy and actually like useful from that. And it shouldn't be. It's ultimately should be a conversation, not just like a chat should be a conversation from here. It shouldn't feel like an interview, it shouldn't feel cold and rigid from there. It should ultimately be like, okay, can I see myself really being in the trenches with this person for those next three to five years in so many different ways?

34:08
Hannah Dittman
Really, really helpful. Sumeet, you've had such great wisdom and so many interesting nuggets and thoughts throughout this chat for founders that might want to reach you to either follow up on questions like you mentioned or to maybe discuss investment. What's the best way for them to reach you? And second part of my question, do you have any advice for anyone interested in consumer investing or maybe joining your team at vhs?

34:33
Semeet Shah
Yeah, best way for founders to reach me, you could definitely email me Sumeethvc. It's a pretty straightforward on there. Definitely make sure if you are pinging me from this mention that you heard about me from the podcast. So definitely want to make sure that pathway gets cleared from there. I'm pretty active on the worlds of social. I really use X and threads these days. Instagram sometimes here and there, but definitely tapping a lot more onto LinkedIn as well. So definitely a secondary level from it. But my email is always open. I definitely always look to see where I could be helpful from that end. On joining the consumer investing world or potentially joining VHS Ventures. You know, we launched a fellowship program last April to build like a part time associate platform.

35:13
Semeet Shah
We may additional opening in the next quarter or so by Q2, but right now fundraising is our priority to make that happen. But if there is anyone who is ever interested in learning more about the consumer investing ecosystem or also is interested in learning more about us and just how we can get more involved, just ping me. You know I might not be able to meet up immediately, but I'm happy definitely just to see where I can help and point you in the right direction because there are just incredible consumer investors, investment firms that are always looking for good people.

35:40
Semeet Shah
But also one big piece of advice I will say if anyone's looking into getting in there is there are obviously various ways to get into venture, but one I would always recommend is find an area sector company space within consumer that you're just truly passionate about and find your pathway, find your platform that you really would like to talk through. Whether it could be substack, whether it could be LinkedIn, whether it could be putting together your own podcast, right? And putting together your own podcast then just really shares up from there. You could end up like the Mike Gelbs of the world. You can end up like the 20 minute VCs, the Harry Stebbings of the world from there.

36:13
Semeet Shah
And I was an early guest on his podcast and you know what was amazing to me about him was that just how genuine he really wanted to learn and learn from people from here. Now the guy has a very prominent venture capital firm of his own and he was just a kid, you know, who loved mojitos when he was working through it but like wanted to learn from investors from that end so anything can truly happen.

36:33
Hannah Dittman
Guys, great piece of advice and so inspirational. I hope everyone's walking away from this conversation feeling like an extra pep in their step and ready to tackle their day and be curious. Sumeet, thank you so much for your time and being so generous with learnings and anecdotes and answering questions. I really appreciate it and it was an awesome chat and were really grateful to have you here today.

36:55
Semeet Shah
Thank you so much Hannah, it was a pleasure chatting with you as well. Thank you for the opportunity for me to come on and just here to help where I can. Hope everybody has a wonderful weekend.

37:06
Hannah Dittman
Well friends, we've now arrived together at the end of another episode of the Startup CPG podcast, the top globally ranked podcast in cpg. And if you love this podcast, you'll love our Slack community even more. Here at Startup cpg, we're a community of brands and experts and you should join, sign up @startupcpg.com you'll then get an invite to our online Slack community of over 35,000 All Star CPG members. Hear about amazing events near you and all our special opportunities. Opportunities to get you in front of buyers, investors, brands and more. It's a free community. So what are you waiting for? I'll catch you on the next episode and I'll see you on the Slack.